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Gold Ascending Channel Supports - Market Sentiment Remains Mixed!

EagleFX

The safe-haven-metal extended its 2-day winning streak and drew bids around the high of $1,740.74, mainly due to the escalated tensions between the United States and China. The protest in America over the Minneapolis George Flyods death also fueled the risk-off sentiment, which eventually provided support to the safe-haven assets. While the broad-based U.S. dollar weakness also kept the yellow-metal higher due to their negative correlation. At this moment, the yellow-metal prices are currently trading at 1,739.29 and consolidating in the range between the 1,729.07 and 1,744.62.

Gold futures were higher 0.33% at $1,757.50 by 1:08 AM ET (6:08 AM GMT).Whereas, the stocks which usually move in the opposite direction to gold, were also up on the day. However, the market traders failed to cheer the positive act by U.S. President Donald Trump of stepping back from announcing any more sanctions on China during his press conference on Friday over the Hong Kong security issue. On the flip side, China was not in the mood to stop the tussles with the United States and delivered some aggressive comments that some dominant groups wanted to fight with the United States instead of picking dialogue, which boosted the risk-off market sentiment earlier and contributed to the yellow-metal gains.

In the meantime, U.S. Secretary of State Mike Pompeo criticized China's ruling party during his Fox interview said that the Chinese communist party views itself as determined for the destruction of western ideas, western democracies, and western values. He added that this party puts Americans at risk by stealing American intellectual property and destroying jobs in the U.S.

Moreover, the risk-off market sentiment could also be attributed to the Minneapolis George Flyods death's protests with multiple fires set near the White House, and suspending bus and rail services in Chicago, which recently exerted some bearish pressure on the U.S. dollar and provided support to the safe-haven assets.

At the USD front, the broad-based U.S. dollar reported losses on the day mainly due to the escalating optimism about the global economic recovery from COVID-19, which pushed investors to withdraw money from the safe-haven U.S. dollar as well as the selling bias in the U.S. dollar could also be attributed to the increasing protests in American cities. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies fell 0.34% to 98.002 by 12:29 AM ET (5:29 AM GMT).


Daily Support and Resistance

S1 1685.9
S2 1707.01
S3 1718.36
Pivot Point 1728.11
R1 1739.46
R2 1749.22
R3 1770.32

Technically speaking, the XAU/USD prices are consolidating in a narrow trading range of 1,743 - 1,724 level, which is extended by the upward channel of the gold. The 50 EMA and RSI both support buying trends in gold; therefore, we should look for bullish trades over 1,428 areas. Continuation of a bullish trend can lead to gold prices towards 1,743 areas, and above this, the next resistance can be seen around 1,753 levels. Good luck!

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